Trumka to Justice Dept.: Investigate Banks
AFL-CIO President Richard Trumka is urging the Justice Department to lead a comprehensive investigation with state Attorneys General to prevent banks from engaging in future unlawful and deceptive practices that could exploit homeowners and put the economy further at risk.
(You can sign an online petition urging President Obama to side with working families in this issue. Click here.)
From Trumka:
We need to hold banks accountable for the fraudulent practices that brought about the worst economic crisis since the Depression. State Attorneys General have been investigating bank fraud, and these critical investigations must not be undermined by a premature and inadequate settlement. We call on the administration to reject any deal that insulates banks from full responsibility.
We commend state Attorneys Generals like New York’s Eric Schneiderman and Delaware’s Beau Biden for their leadership and courage in calling for a real investigation and relief on a scale that helps the millions of homeowners who face a new wave of foreclosures.
The economy is currently weighed down by $750 billion in negative home equity, so relief on a massive scale is needed to lift home values Read the rest of this entry »
IMF Authors: Banking Deregulation Worsens Economic Crises
In corporate boardrooms and right-wing gatherings, so-called “free-market principles” are hailed as the keys to a strong and growing economy, and regulations designed to restrain banks and financial firms from driving the economy off a cliff — as they nearly did four years ago — are maligned as job-killers. In reality, according to the authors of a new working paper from the International Monetary Fund (IMF), the global financial crisis of 2007-2009 was worse in countries where financial institutions got the deregulation for which they lobbied—and that’s also true of the United States.
In “The Economic Crisis: Did Financial Supervision Matter?” economists Donato Masciandaro, Rosaria Vega Pansini and Marc Quintyn look at the banking systems of democratic nations with market economies, and report:
[T]he degree of banking regulation seems to be particularly significant: more banking deregulation is negatively correlated with countries’ economic resilience….The same seems to be true when considering financial resilience…other things being equal, more restrictions on bank activities seem to have reduced the likelihood of suffering the recent financial crisis.
Friday Fun: Watch a Bankster Squirm
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Check out this video and see what happens when a Bankster is confronted with his own greed—and brought along to admit that a teeny, tiny financial transaction (“Robinhood”) tax on stock trading wouldn’t hurt that industry one bit. But it would make a huge difference in the lives of the 99 percent.
Shuler Talks with Students at Occupy Wall Street
Yesterday, I had the opportunity to head to New York where Occupy Wall Street is now entering its third week. I had just flown into New York City from Minneapolis and was coming off the enthusiasm and passion of 800 young workers at the AFL-CIO Next Up Summit. Young workers at the Summit issued a statement of support for Occupy Wall Street, and I had to see and experience the movement first-hand.
I spoke to several students from Rutgers University about why they were participating in the movement. They were concerned about the imbalance in the economy and the runaway greed they’re seeing in the financial economy. While the anger and frustration is what’s rightly getting the attention, we also talked about the importance of focusing on solutions. And when we start talking about that, it was clear there are real policy changes that can put power back in the hands of the 99 percent – things like the financial speculation tax that would help pay for the creation of jobs, the Buffet rule and holding banks accountable for corrupt foreclosure practices.
I was inspired by what I saw — people of all stripes are expressing their anger and frustration at the lack of attention paid to “the other 99 percent.”
It’s so exciting to watch a new generation mobilize an organic movement for social justice — it gives me tremendous hope and optimism that we can get our country back on track now and for the future.
Make the Banks Pay Their Fair Share!
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The foreclosure crisis just keeps getting worse. More than 12 percent of residential mortgage loans are in foreclosure or at least one payment past due. Millions of homes have been needlessly foreclosed on because banks have not modified homeowners’ mortgages to affordable levels. On top of this misery, the U.S. Department of Housing and Urban Development’s (HUD’s) funding for counseling to prevent foreclosures has been cut to zero.
Government efforts to hold banks accountable for the “robo-signing” scandal continue. Last month, federal regulators ordered banks to clean up their mortgage-servicing processes to prevent wrongful foreclosures. Federal and state officials also have proposed that the banks pay $20 billion in penalties. The banks have offered $5 billion, but they object to using the money to reduce mortgage principal amounts.
There may be more news to come on improper foreclosure practices by the banks. A new report shows the HUD Inspector General has found more evidence of wrongdoing:
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
Holt Baker: ‘We Want Our Jobs Back’
Shouting, “We want our jobs back,” union members and community allies rallied and marched in Cincinnati yesterday to send Morgan Stanley the message that if it can thrive on taxpayer bailout money, it needs to make sure the community prospers as well. The action was part of the AFL-CIO’s more than 200 “Make Wall Street Pay” events taking place through the end of this week. Speaking to the crowd, AFL-CIO Executive Vice President Arlene Holt Baker blasted the selfish actions of the Big Banks:
At a time when young people across the country are worried about whether they will lose their jobs out there when they graduate or whether they will find a job, Morgan Stanley paid—get this—$3 million to their lobbyists to kill financial reform. While Morgan Stanley refuses to lend money to small businesses here in Ohio, they’re keeping the company afloat with $10 billion of your hard-earned money. We bailed out these Big Guys behind us, so now it’s time to take that money and give it to the community and local banks so that bank will start to hire people.
‘I Am Not Your ATM’
Working people have plenty to be angry with Wall Street about. A $700 billion bailout. Toxic assets and loan guarantees to the tune of hundreds of billions of dollars. A financial crisis and credit crunch. Billions of dollars in six- and seven-figure bonuses to the Wall Street executives who got us into this mess.
Unemployment reaching 10 percent. A mortgage crisis extending far beyond subprime loans. Abusive credit and debit card fees. More than five job-seekers for every one job.
Wall Street has treated Main Street as a giant ATM—gambling with the economy, then coming back with their hands out for help. But somehow, no matter how much help the banks need to survive, they always have the resources to fight proposals to regulate them or get them to pay their fair share.
Jobs, Anyone?
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When will the lawmakers in Washington, D.C., figure out that putting America’s unemployed workers back to work means there actually needs to be jobs available? And that means creating them. The AFL-CIO’s five-point jobs plan includes job-creating measures, such as rebuilding the nation’s roads, schools and infrastructure, and lending Troubled Assets Relief Program (TARP) funds directly to small and medium-sized businesses via community banks. If small businesses can get credit, they will create jobs. The U.S. House passed a good jobs bill last month, but, as usual, the Senate is sitting back in its privileged chambers and doing nothing. Time to act. Now.
- There are now 6.4 unemployed workers for every ONE job in the United States. New data out today by the U.S. Bureau of Labor Statistics show there were 12.9 million more unemployed workers than job openings in November, an increase from 6.1 percent in October.
To Create Jobs, Let’s Help Small Business, Not Just Big Banks
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When our banking system was in crisis last year, Congress acted with lightning speed to bail out banks—but although Wall Street and the banksters have seen a recovery, working families are still facing a crisis of disappearing jobs.
One of the best ways to make sure our economy is creating new jobs is to take funds from the Troubled Asset Relief Program (TARP) and rather than using them to just bail out the big banks, direct the funds to their intended purpose: restoring lending and credit to put people to work and our economy on the right track. That’s one of the key elements of the AFL-CIO’s five-point plan for job creation.
TARP, unfortunately, bailed out Wall Street and big banks without helping Main Street. Billions of dollars have gone to these big banks—but too often those dollars turned into executive pay and bonuses and Capitol Hill lobbying, not lending to spur economic growth. Even before the economic crisis, lending by banks to small and medium businesses was declining—and bank bailouts have not restored this critical lending.
Trumka: Bank Bailout Language in Proposed House Financial Services Committee Bill Doesn’t Work
Today, AFL-CIO President Richard Trumka is delivering a message to Congress: The United States needs financial reform that works, and key elements of the proposed legislation covering bank bailouts fall far short of that standard.
In testimony today before the House Financial Services Committee, Trumka said while parts of the proposed bill on financial reform bring necessary changes, the elements dealing with the “shadow financial sector”—derivatives, hedges funds, private equity and bailout funds—are going in the wrong direction. As proposed, they could put even more power into the hands of unaccountable bankers without fixing the financial sector failures that led to our current crisis.
